• Tu T. Le

SAI Newsletter #9 - October 2, 2018



All,


Since we’re in Day 2 of Golden Week we will have a shorter than normal newsletter this week.

We’re received a lot of good feedback on the newsletter and it’s generally been very positive so please do let us know your suggestions on how you think it can be improved.


I will be in the U.S. next week to attend an event sponsored by the State of Michigan called the ‘Michigan China Mobility Startup Tour.’ This event is specifically targeted to Chinese ‘mobility’ startups that would like ‘direct access to Michigan’s mobility startup ecosystem.’


This is a follow-on event to coincide with Michigan Governor Rick Snyder’s recent MOU signing with China’s Ministry of Science and Technology to ‘advance cooperation within the automotive and technology sectors, including new energy and autonomous vehicle technologies.’


With that said, may get the newsletter out by Wednesday and hope to share anything interesting from the conference.

If there are any particular topics you’d like us to cover, feel free to send over your suggestion to tle@sinoautoinsights.com.


If you know of anyone who would like to sign up for this newsletter please have them visit: www.sinoautoinsights.com. Thanks for reading.


The Sino Auto Insights team

Other

Elon Musk before Elon Musk? (www.bloomberg.com)

An introduction for western audiences to Wan Gang, the godfather of the electric vehicle push in China.

He should be given a lot of credit for moving China towards electric vehicles but GM first built the EV1 in 1996 so for the author to claim that he’s the world’s leading electric car visionary would not be accurate IMHO.

If patents are a good measure of a country’s ability to innovate, China has a long way to go. (www.bloomberg.com)

Those that follow China know that there is a lot of pride in the fact that they file as many patents as they do, but this article peels a few layers of the onion and notes that although high in quantity, the quality of innovation is still wanting.

This is why the trade war and the cooling relationship between the U.S. and China is so important to watch. The cutting-edge technology needed to get to level 5 autonomous is not fully formed. Certain technologies, such as LIDAR, sensors and batteries still need to be further developed to enable vehicles to be driven without human intervention so if the U.S. decides to close off some of that technology, it could make it much more challenging for China to ‘dominate’ the sector.

Even with the Chinese government promoting the sector and the amount of data that’s going to be generated due to the larger number of vehicles on the road, it’s still going to take some breakthroughs to push the technology to mass adoption that the Chinese hope they can develop for themselves.


OEMs

Ford broadening their relationship with Baidu. (www.jdsupra.com)

Ford seems to be giving a lot away inside their vehicles by partnering with Baidu, at least in China. This differs a bit from what I understand their U.S. strategy is, which they plan on doing a lot of their own dev work for ‘monetizing’ the data in the car.

This makes sense since Ford is SO behind their main competitors in China, but alarming nonetheless since they seem to be conceding control to their technology partner.


Why it’s so tough for the traditional OEMs to make money on NEVs. (www.reuters.com)

OEMs have and will continue to invest billions of dollars to develop their lineups of electric vehicles just to sell most of them at a loss.

The economics of manufacturing NEVs at the current forecasted volumes does not allow profits to be made and will not for quite some time, even with the forecasted growth in the segment.

If the big boys aren’t going to make money but are still willing to manufacture and sell them, this does not bode well for the EV startups that are coming online within the next few years.

Capital that may have been set aside for R&D or further development of the services, charging stations, etc. will most likely need to be redeployed to marketing and sales in order to ensure that their products can carve out their own positioning in the market.


Coming to China soon? (www.abcnews.go.com)

Brands have launched pilot subscription services in the U.S. to allow a bit more variety for those that aren’t interested in 2-3 year car leases.

Pricing seems quite high but the flexibility to swap out Porsches depending on the occasion sounds pretty attractive.

From an automaker perspective, managing a fleet of vehicles would something they could outsource to dealers and from the sounds of it could attract customers that are new to the brand.


Brands and logos, explained. (www.gearpatrol.com)

A fun article that explains the meaning of many automakers’ logos. Does not have them all, but quite a few.


#SinoAutoInsights #ElonbeforeElon #patents #Ford #Baidu #moneyloser #brands&logos


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